Is Digital Transformation Tightening SMEs' Access to Debt?

Hangerhagen, Emilie Håbrekke; Kongshaug, Anna Margrete
Master thesis
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https://hdl.handle.net/11250/3132666
Date
2023
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Abstract
Is the constantly increasing technology always a blessing, or does it worsen existing

challenges? This thesis analyzes how digital transformation in the financial sector affects

Small and Medium Enterprises (SMEs) debt. Using the Payment Service Directive No. 2

(PSD2) as a shock into digital transformation, we employ a difference-in-differences (DiD)

methodology to analyze the changes in SMEs' debt ratios triggered by digital transformation.

First, our study investigates how SMEs are affected by digital transformation in the financial

sector. Second, we test whether SMEs experience varying impacts depending on their

characteristics. With this approach, we aim to understand the reasons behind the effect of

digital transformation on SMEs' debt in the financial sector.